Feds also targeting Uresti’s consulting company

FBI agents carry boxes as they leave state Sen. Carlos Uresti’s law offices in San Antonio on Feb. 16.

FBI agents carry boxes as they leave state Sen. Carlos Uresti’s law offices in San Antonio on Feb. 16.

Photo: Bob Owen /San Antonio Express-News

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Carlos Uresti Jr., left, son of state Sen. Carlos Uresti, talks with FBI agents during a search of the senator’s San Antonio offices on Feb. 16.

Carlos Uresti Jr., left, son of state Sen. Carlos Uresti, talks with FBI agents during a search of the senator’s San Antonio offices on Feb. 16.

Photo: Bob Owen /San Antonio Express-News

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State Sen. Carlos Uresti said the Feb. 16 search of his offices was related to a broad investigation of FourWinds Logistics, a bankrupt frac-sand company accused of defrauding investors.

State Sen. Carlos Uresti said the Feb. 16 search of his offices was related to a broad investigation of FourWinds Logistics, a bankrupt frac-sand company accused of defrauding investors.

Photo: Ron Cortes

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FBI agents carry boxes to a truck after they raided the San Antonio offices of state Sen. Carlos Uresti on Feb. 16.

FBI agents carry boxes to a truck after they raided the San Antonio offices of state Sen. Carlos Uresti on Feb. 16.

Photo: Bob Owen /San Antonio Express-News

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Federal agents raided the law offices of of state Sen. Carlos Uresti, the San Antonio Democrat, on Feb. 16. FBI and IRS agents were at the offices for about six hours.

Federal agents raided the law offices of of state Sen. Carlos Uresti, the San Antonio Democrat, on Feb. 16. FBI and IRS agents were at the offices for about six hours.

Photo: Guillermo Contreras /San Antonio Express-News

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Denise Cantu, 36, holds a poster of her daughter, Annissa Marie Salazar, 14, at her home in Harlingen, Texas, Sunday, Jan. 17, 2016. Her daughter, Annissa , and son Johnathon Dominic Cortez, 5, were killed in an auto accident in 2010 near Pleasanton, Texas after a tire in their vehicle blew out. She invested proceeds from an insurance settlement from that accident with San Antonio frac sand company FWLL LLC, doing business as FourWinds Logistics. FourWinds lost her investment and she had sued the company before it filed for bankruptcy. less

Denise Cantu, 36, holds a poster of her daughter, Annissa Marie Salazar, 14, at her home in Harlingen, Texas, Sunday, Jan. 17, 2016. Her daughter, Annissa , and son Johnathon Dominic Cortez, 5, were killed in ... more

Photo: JERRY LARA, Staff / San Antonio Express-News

Feds also targeting Uresti’s consulting company

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State Sen. Carlos Uresti’s consulting company, Turning Point Strategies, was one of the targets of the raid on his law offices by federal authorities 10 days ago, law enforcement sources said.

At the time of the Feb. 16 search, Uresti issued a statement saying it was part of a “broad investigation” of FourWinds Logistics, the scandal-plagued oil-field services company that he once represented. But FBI and Internal Revenue Service agents also were there to gather information on Turning Point, the sources told the San Antonio Express-News.

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That client, Denise Cantu of Harlingen, lost most of that money, which came from the settlement of a wrongful-death case involving two of her children. Uresti was part of her legal team.

The San Antonio Democrat’s ties to Cantu didn’t end there. Corrected versions of Uresti’s 2014 and 2015 personal financial statements filed in November show he received at least a $25,000 loan from Cantu.

The 2014 report also indicated Uresti had borrowed at least $75,000 from three other individuals, including at least $25,000 from one of his staffers.

A spokesman for Uresti, 53, said the lawmaker was not available for comment. In August, Uresti said he had been contacted by the FBI to be a witness in the FourWinds investigation.

Turning Point is housed inside the Uresti law firm’s building at 924 McCullough Ave. The company’s name appears underneath the law firm’s on the building’s entrance.

In November, the same month Uresti easily won re-election for the District 19 Texas Senate seat, an ad pitching Turning Point’s services appeared in Shale Oil & Gas Business Magazine. The company says it provides consulting services in such fields as oil and gas, utilities, alternative energy, and housing and development.

“Have you been looking for someone to help your company thrive and just need to meet the right people?” the ad reads. It doesn’t identify Uresti, who’s pictured in the ad, as a state senator.

“It could be seen, I suppose, by some as being influence peddling,” said Andrew Wheat, research director at Texans for Public Justice, a left-leaning watchdog group in Austin. “At the same time, it doesn’t appear that he is listing himself here as a senator, or wrapping any of the trappings of his state office into this ad, which can create problems … if you’re using your office in some sort of a business venture.”

During a March 2015 interview with Shale Oil & Gas Business Magazine, Uresti noted how his Senate district extends from the south side of San Antonio down into the Eagle Ford Shale area and out west to include a good part of the Permian Basin.

“So I’m bookend(ed), if you will by both of the shale plays, which provides a unique opportunity for my business, Turning Point Strategies,” he said. “The idea behind Turning Point Strategies is for those startup companies, or a company that has been doing very well, been very successful, but maybe wants to move to the next level. So they’re at a turning point, if you will.

“They’re looking to think outside the box,” he continued. “That’s where we come in to provide those different strategies to help them turn the corner. … So that’s what we do. We’ve done that for several years. Been very successful. Helped a lot of different companies at many different levels succeed.”

Turning Point was formed in 2007, but state corporate records show its registration was revoked in 2009 for “failure to file a franchise tax return and/or pay state franchise tax.” The company didn’t seek reinstatement until almost five years later.

Turning Point previously came up at a federal grand jury in the fall. Uresti’s son Carlos Uresti Jr., who became Turning Point’s registered agent in late 2015, was spotted by reporters to be among the witnesses who appeared at the hearing.

Sources familiar with it said the proceedings were called by prosecutors to request documents as part of their investigation. No one was arrested at the time and no indictment was issued, but one focus was Turning Point, the sources said. Lawyers for Turning Point and Uresti Jr. appeared during the hearing but had no comment at the time.

Two other sources familiar with the investigation said the FBI appears to be looking at Turning Point with suspicions that it was allegedly a vehicle for funneling money used to buy influence.

“It’s supposedly a consulting company … to strategize with companies on how to get stuff done in the Legislature,” one source said about Turning Point. “That in itself is not illegal. There’s others like it. They’re not lobbyists, they’re more like (facilitators) who know people and can set up meetings. I think the (FBI’s) suspicion is that it (Turning Point) was to get Uresti’s favor — a backhanded way to float money to the lawmaker.”

But another source said it seemed odd that the feds searched the law firm and Turning Point’s offices so late in the game, given the investigation tied to Uresti has been in the news for months.

“That seems like they don’t have the evidence they need,” the source said. “It just seems that’s one thing they should have done early on. But, that they got a search warrant shows they convinced a judge that they had probable cause that a crime was committed, or that they believe they would find evidence of it.”

Three FourWinds officials already each have pleaded guilty to a single charge of conspiracy to commit wire fraud. They have not yet been sentenced.

Investors who entered into joint ventures with FourWinds have alleged in bankruptcy court documents that CEO Stan Bates wasted their money on personal expenses, expensive gifts, exotic car rentals and lavish vacations. Bates denied the allegations last year, adding that investigators had been after Uresti for a “long, long, long time.” Uresti called that “absurd.”

Nevertheless, Uresti has been swept up in the investigation of FourWinds, where he served in multiple roles. Uresti provided legal services and acted as the company’s outside general counsel for four or five months in the latter part of 2014, he said in an interview last summer. He said he resigned his position prior to the start of the 2015 legislative session.

Uresti also was listed as a 1 percent owner of FourWinds, though he said there never was a transfer of stock certificates. The company loaned him $40,000, which he failed to initially disclose on his personal financial statement filed with the Texas Ethics Commission. The bankruptcy trustee later sued Uresti to collect the money. The matter was resolved with Uresti paying back $30,000.

The lawmaker also served as a FourWinds pitchman. During a Sept. 19, 2014, subcommittee hearing for the Senate Committee on Natural Resources & Economic Development studying the impact of Mexico’s energy reforms on Texas, Uresti took the opportunity to plug FourWinds while discussing the then-bustling Eagle Ford Shale.

“There’s a company I’m aware of, FourWinds. They provide frac sand,” Uresti said during the hearing. “In the last several months, they’ve become very successful.”

Uresti’s membership on the Natural Resources committee, which oversees public policy on oil and gas, has raised questions about potential conflicts of interest given his ties to FourWinds. He wasn’t reappointed to serve on the committee this legislative session.

Uresti’s initial role with FourWinds involved recruiting investors to enter into joint venture agreements with FourWinds. He said he recruited two investors, San Antonio businessman Hector Navarrete and Denise Cantu, the Harlingen woman.

Before FourWinds, Uresti was part of a legal team that secured a substantial settlement for Cantu in the wrongful-death case of two of her children. The rear tire of her Ford Explorer blew out, causing the SUV to veer into a grassy median, roll over and kill her 13-year-old daughter, 4-year-old son and two friends in August 2010.

Cantu invested a chunk of the settlement money, $900,000, with FourWinds. Uresti received a $27,000 commission on Cantu’s investment, which he said was earned through Turning Point Strategies.

Another investor, San Antonio businessman Richard Thum, said he met with Uresti before deciding to invest $1.4 million with FourWinds. Thum said Uresti’s involvement gave FourWinds a measure of credibility.

Thum recalled Uresti saying he “could make a call and get past the secretary” if FourWinds ever had a problem. Uresti called that “completely untrue.”

Uresti has denied any wrongdoing in connection with efforts to bring in investors for FourWinds. He said he had been advised by legal counsel that he did not have to register as a securities broker to pitch the FourWinds investment.

Four days before the November election, Uresti corrected his 2014 and 2015 personal financial statements to include, among other new disclosures, that he owed Cantu at least $25,000. Cantu said in an email that she loaned $25,000 to the lawmaker.

“He said it was for some type of road contracting,” she said, though hazy on the details. “I just figured since he represented me as an attorney he was taking care of the legal contract and distribution of the loan.”

Cantu added, “I don’t think (Uresti) was an investor, but I was told he probably got me to trust him with that small loan so that I could invest in FourWinds.”

Roads have been a particular legislative interest of Uresti’s. In 2013, he authored legislation to get funding for all of the counties in Texas whose roads were getting torn up by activities related to energy production.

A $225 million fund ultimately was approved by lawmakers that year, but changes made during the session to assure passage led to charges that the money was being spread too thin. Counties far away from the shale boom got to share in the pot. Of Texas’ 254 counties, 191 counties applied for and received funding.

“There are so many different stakeholders at the table that wanted input,” Uresti told the Texas Tribune in late 2013. “It’s not as simple as us saying we’re going to give one particular county a greater preference.”